Mr. McDonnell:
I am seeking to find in the Bill--perhaps its promoter can help me--a restriction that states that the voter who is eventually elected to cast a vote on behalf of a company has to be a British citizen. I accept, however, that that does not mean that the company has to have its main interest in this country. It could be a multinational corporation based elsewhere, and I accept my hon. Friend's concerns about such a company's interest in the future and in its stake in the City corporation and in this country. That is perhaps a matter that could be examined subsequently, and I am sure that the City corporation would welcome amendments to that effect.

In amendment No. 58, the City corporation is required to establish a structure of business operational constituencies within the BEC. Those constituencies would be operational, not geographical, and they should reflect the various business operations that take place in the City. Only the City corporation itself could draw up such a constituency structure, as only it has at its fingertips the required expertise and knowledge of the variety of business operations undertaken in the square mile.

The corporation would establish which groupings and businesses were interested in appointing voters to the BEC. They would be invited to register for their particular operational grouping or business operational constituency and my amendment, based on the number of businesses registering for particular operational constituencies, would ensure that voters elected from a constituency were allocated proportionately. Voters would be distributed to

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the various operational constituencies in proportion to the number of qualifying bodies registered for each business operational constituency.

Mr. Skinner rose--

Mr. McDonnell:
I have obviously lost my hon. Friend.

Mr. Skinner:
No, I have sussed this out--it is pretty clear. My hon. Friend has gone a long way to accommodate the people in the City. I know that he has a long-standing interest in London and all the rest of it, but something tells me that some people will get more than one vote. We have had that problem with block votes and electoral colleges; it has always been difficult to live with.

Before I go into the Lobby, I want my hon. Friend to give me an assurance. Would people in the City of London get more than one vote if they had more than one business interest? As sure as night follows day, we know that the Tories and their pals do not meddle in one business; they have their fingers in every conceivable pie. They would pile up votes left, right and centre while Joe Soap would not get one.

Mr. McDonnell:
I accept that there is a weakness in the proposal. An individual shareholder or owner of a company could participate in a number of companies. As a result, he could register in not one business operational constituency in the electoral college, but several. That is a definite problem, but this is a compromise Bill. However, there is further a difficulty in that a resident with a vote could hold shares in a business, which could also have a vote. The Bill is not perfect, so I am simply trying to improve it.

Mr. Barnes:
Presumably, such a person could also be a City employee, so the electoral college could have three categories. A person might be involved in each and may have multiple votes.

Mr. McDonnell:
The proposed voting systems are similar to those relating to the constitution of the Labour party. People may have multiple votes, depending on their membership of and affiliation to the Labour party. There is an inherent problem here, but we have identified a series of problems with the Bill and the amendment represents an attempt to arrive at a situation for which we could garner support in the Chamber. Perhaps amendments to the review mechanism, which I hope to debate later, could be tabled.

Mr. Kelvin Hopkins (Luton, North):
I have been worrying for some minutes about my hon. Friend's reference to determining the operational and geographical constituencies according to which the election would be held. He suggested that those would be decided by the City of London corporation, but I am anxious that an external independent monitoring organisation such as the Local Government Commission has not been mentioned, even in respect of operational constituencies in the business community. Will he elaborate and reassure me? We do not want friends to be scratching each other's backs while the constituencies are determined.

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7.45 pm

Mr. McDonnell:
The amendment deals with operational, not geographical, constituencies. Operational constituencies are defined as the different elements of the business electoral college that reflect the different businesses that operate in their different ways in the City. I have confidence in the City corporation, which would be able to provide an accurate definition.

Like any other organisation that acts in the public realm, the City corporation would be open to judicial review should it offend against reasonable behaviour. The Wednesbury principles, which provide that all relevant factors have to be taken into account and all irrelevant factors dismissed in determining a reasonable decision, would obviously apply to the City corporation's delineation of the business operational constituencies. Therefore, protection would be given to individual businesses and their members, residents and employees. I understand the argument for external verification, but the reality is that external verification could easily be pursued in the courts.

Mr. Dismore:
I am becoming confused about the reference to operational and geographical constituencies. It is not clear whether my hon. Friend is saying that there should be an operational constituency for each ward or one for the whole City. Establishing an operational constituency for each word would be complex and a different kettle of fish. Indeed, it could lead to multiple voting of the type described by my hon. Friends. Would there be one operational constituency for the whole of the City's borders?

Mr. McDonnell:
My view is that we are discussing one for the whole of the borders on the basis that elections would have to be run according to slates of candidates rather than lists of individuals. That would be manageable, given that there are only 5,000 residents. The amendment would also overcome some gerrymandering of ward boundaries, although we were given assurances by the City corporation that there would be reforms in that respect. However, I do not believe that any have been carried out.

Mr. Dismore:
Now I am becoming worried. My hon. Friend referred to slates. Did he mean open party lists or closed party lists? Did he mean any kind of party list?

Mr. McDonnell:
My remarks represented only a supposition, not a proposal. Rather than use geographical districts, we should pay regard to the reality of what is a business district in total. Therefore, rather than define geographical constituencies, we should define constituencies of interest in terms of the work force and the businesses. I have confidence in the City corporation being able to draw up a list of the various business operational constituencies adequately to reflect the range of activities that go on in the City of London.

Mr. Dismore:
If my hon. Friend is referring to slates of one sort or another, could a particular occupation dominate in the City? Could there be a solicitors' slate, whereby a batch of solicitors could outvote all the other occupational groups? Could the stockbrokers have a slate? We would end up with what we have already, so how would the reforms help?

Mr. McDonnell:
With great respect to my hon. Friend, no protection against solicitors is known to man or beast

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or other, but let me explain by exemplifying how the structure would work. I shall draw on the City corporation's latest report on London's contribution to the UK economy, which was published in November 2000 and commissioned from the Centre for Economics and Business Research.

In examining the financial contribution of London and the City, the report defines the major activities and business operations in the London and City economy. Therefore, it describes the industrial or business composition of the City of London area. It also shows that operational constituencies could readily be drawn up, although I accept that they could be numerous.

The report says, for example, that separate operational constituencies could be established for banking, finance, insurance, business services and leasing as well as for service sectors including communications, transport, storage, distribution, hotels and catering. The amendment would allow for that. Alternatively, business operational constituencies could be constructed that would delineate a company with multiple roles and then determine which role was dominant within that company, or the company could opt for a particular business operational constituency.

The corporation may wish to group businesses in broader and less numerous business operational constituencies. For example, banking and finance might form one group, insurance a second, business services a third, and distribution, communications, hotels and catering a fourth. If the amendment were accepted, the corporation's town clerk would invite all qualifying bodies--by advertisement and by letter--to register, allowing them to opt for a particular business operational constituency. The town clerk--I believe that the City corporation describes him as the chamberlain--could be required to investigate the appropriateness of a qualifying body's registering within a particular operational constituency, if the registration was challenged. There would therefore be an element of protection against abuse of that kind, and against practices that would constitute manipulation of votes.